The Travelers Companies, Inc. · NYSE:TRV
The Travelers Companies — Q1 2015 Earnings Presentation
22 slides from The Travelers Companies's earnings presentation, Apr 21, 2015
Slide 1: First Quarter 2015 Results
First Quarter 2015 Results April 21, 2015 1
Slide 2: Long-Term Financial Strategy
Long-Term Financial Strategy Balanced Generation of approach to Meaningful and top tier earnings rightsizing capital sustainable and capital and competitive substantially in growing book advantages excess of growth value per share needs over time CREATE SHAREHOLDER VALUE Objective: Mid-Teens Operati
Slide 3: First Quarter 2015 Overview
First Quarter 2015 Overview Travelers Reports Quarterly Net and Operating Income of $833 Million and $827 Million, Respectively, and Net and Operating Income per Diluted Share of $2.55 and $2.53, Respectively Strong Return on Equity and Operating Return on Equity of 13.4% and 14.5%, Respectively Boa
Slide 4: Consolidated Performance
Consolidated Performance ($ in millions, except per share amounts, after-tax) First Quarter 2015 2014 Change Operating income $ 827 $ 1,052 (21) % per diluted share $ 2.53 $ 2.95 (14) % Included the following items: Net favorable prior year reserve development $ 158 $ 190 Catastrophes, net of reinsu
Slide 5: Very Strong Financial Position
Very Strong Financial Position ($ and shares in millions, except per share amounts) Capital March 31, December 31, • At or above target levels for all rating agencies. 2015 2014 • Repurchased 6.3 million shares during the first quarter 2015 at Debt $ 6,349 $ 6,349 a total cost of $672 million. 1 Com
Slide 6: Net Investment Income
Net Investment Income ($ in millions, after-tax) Total First Quarter 2015 Commentary • Net investment income from the long-term fixed income $582 $568 portfolio declined modestly from the prior year quarter $546 $554 $553 $513 $478 due to lower reinvestment rates, as expected, and from volume and mi
Slide 7: Components of Operating Return on Equity
Components of Operating Return on Equity 14.4% 12.5% 6.1% 11.0% 15.5% 15.5% 17.8% 14.5% 9.5% 9.3% 9.4% 0.7% 9.0% 8.8% 9.0% 0.9% 1.3% 8.5% 8.4% 0.5% 0.9% 0.1% 0.1% 1.2% 1.7% 7.3% 1.5% 7.1% 7.2% 7.0% 0.7% 8.3% 8.3% 8.0% 8.1% 7.3% 6.9% 7.1% 6.6% 4.9% 3.2% 1.6% 2005 (2.9%) through 2009 2010 2011 2012 20
Slide 8: Business and International Insurance Performance
Business and International Insurance Performance ($ in millions) First Quarter 2015 2014 Change Operating income $ 515 $ 694 (26) % Loss and loss adjustment ratio 61.2 % 59.8 % Underw riting expense ratio 32.1 29.4 Combined ratio 1 93.3 % 89.2 % (4.1) pts Net favorable prior year reserve development
Slide 9: Domestic Business Insurance (Ex. National Accounts)
Domestic Business Insurance (Ex. National Accounts) Illustrative Business Statistics 12% ▲ Renewal Premium Change1 % Renewal Rate Change2 % 10% • Exposure/Other % 8% 6% 4% 4.8% 3.8% 2% 3.0% 2.3% 1.4% - (2%) 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 ($ in millions) Retention 81% 81% 82% 82% 84% Renewal premium
Slide 10: Domestic Business Insurance: Select Accounts
Domestic Business Insurance: Select Accounts Illustrative Business Statistics 12% ▲ Renewal Premium Change1 % Renewal Rate Change2 % 10% • Exposure/Other % 8% 6% 4.9% 4.6% 4% 3.9% 3.5% 2% 2.8% - (2%) 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 ($ in millions) Retention 79% 79% 80% 80% 81% Renewal premium 8.8% 8
Slide 11: Domestic Business Insurance: Middle Market
Domestic Business Insurance: Middle Market Illustrative Business Statistics 12% ▲ Renewal Premium Change1 % Renewal Rate Change2 % 10% • Exposure/Other % 8% 6% 5.4% 4.2% 4% 3.3% 2% 1.8% - 1.1% (2%) 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 ($ in millions) Retention 83% 83% 84% 84% 87% Renewal premium 6.8% 6.3
Slide 12: Domestic Business Insurance: Other Business Insurance
Domestic Business Insurance: Other Business Insurance1 Illustrative Business Statistics 12% ▲ Renewal Premium Change2 % Renewal Rate Change3 % 10% • Exposure/Other % 8% 6% 4% 3.5% 2.1% 2% 2.3% 1.3% - 0.7% (2%) 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 ($ in millions) Retention 76% 78% 78% 80% 81% Renewal prem
Slide 13: International Insurance
International Insurance ($ in millions) Illustrative Business Statistics 2014 2015 1Q 2Q 3Q 4Q 1Q 1 International Retention 84% 81% 81% 82% 84% Renewal premium change 2 1.5% 2.0% (1.0%) 1.5% 1.3% New business $85 $93 $72 $69 $53 1 Excludes the surety line of business as surety products are generally
Slide 14: Bond & Specialty Insurance Performance
Bond & Specialty Insurance Performance ($ in millions) First Quarter 2015 2014 Change Operating income $ 124 $ 154 (19) % Loss and loss adjustment ratio 37.6 % 31.0 % Underw riting expense ratio 38.5 37.6 1 Combined ratio 76.1 % 68.6 % (7.5) pts Net favorable prior year reserve development 6.9 13.2
Slide 15: Bond & Specialty Insurance
Bond & Specialty Insurance ($ in millions) Illustrative Business Statistics 2014 2015 1Q 2Q 3Q 4Q 1Q 1 Management Liability Retention 85% 84% 83% 83% 85% Renewal premium change 2 7.2% 3.3% 3.9% 4.8% 4.5% New business $36 $36 $33 $36 $38 1 Excludes the surety line of business as surety products are g
Slide 16: Personal Insurance Performance
Personal Insurance Performance ($ in millions) First Quarter 2015 2014 Change Operating income $ 252 $ 268 (6) % Loss and loss adjustment ratio 55.2 % 55.6 % Underw riting expense ratio 28.3 28.0 Combined ratio 1 83.5 % 83.6 % 0.1 pts Net favorable prior year reserve development 7.5 7.5 Catastrophes
Slide 17: Personal Insurance Performance
Personal Insurance Performance First Quarter 2015 2014 Change Agency Automobile 1 Loss and loss adjustment ratio 64.4 % 67.7 % Underw riting expense ratio 25.8 25.6 Combined ratio 2 90.2 % 93.3 % 3.1 pts Net favorable prior year reserve development 2.8 - Catastrophes, net of reinsurance - - Underlyi
Slide 18: Personal Insurance
Personal Insurance ($ in millions) Illustrative Business Statistics 2014 2015 1Q 2Q 3Q 4Q 1Q 1 Agency Automobile Retention 2 80% 81% 82% 83% 83% Renewal premium change 3 6.7% 6.8% 6.1% 5.0% 4.6% Policies in Force (in thousands) 1,985 1,981 1,990 2,000 2,021 • Sequential quarter growth (1%) -% -% 1%
Slide 19: Appendix
Appendix Additional Information Additional Information 19
Slide 20: Explanatory Note
Explanatory Note This presentation contains, and management may make, certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Words such as “may,” “w
Slide 21: Disclosure
Disclosure In this presentation, we may refer to some non-GAAP financial measures. For a reconciliation of these measures to the most comparable GAAP measures and a glossary of financial measures, we refer you to the press release and financial supplement that we have made available in connection wi
Slide 22: The Travelers Companies, Inc.
The Travelers Companies, Inc. Additional Information Additional Information 22
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